Business Name Blues is a 3-part series in which I talk about the experiences I had in naming my business and give tips based on lessons I’ve learned in the process. Part 1 explores choosing the business name. Part 2 looks into the online aspect of business naming. Part 3 closes with the legal and tax steps necessary to ensure your business name is protected. Also, as I go through each part, I will be updating the Resources page with a Business Naming section to assist you with resources and links to help you make the right moves when naming your business.
The Shady Underbelly
Proud of accomplishing the first task on the road to establishing my business by coming up with a good name, the next step I took was to register the domain name for my new company, Jiffy-PC. In hind sight, I should have waited to do this until after I got the name registered with my State first (you’ll find out why in part 3), but I was excited to get my website registered because I had already had experience with domain name registration. Finally, something about starting a business that I knew how to do! Not so fast! As it turns out, this would be my first exposure to the shady underbelly of the domain name registration scene. I learned a lot during this process and at the end of this post, I’ll give you some tips that may help you if you ever run into this kind of situation.
Originally, when I searched for my business name to make sure it wasn’t in use, I checked Jiffy-PC.com…clear! Then I searched for Jiffy-PC in google. Clear, no businesses established with that name that I could tell. Then I realized that if someone heard the name “Jiffy-PC” spoken, and didn’t see it written down, they’d be inclined to spell it JiffyPC, with no dash. In that case, I thought I’d better make sure that JiffyPC wasn’t being used either. I typed jiffypc.com into my browser, hit enter, and…staring me in the face was a full website! Doh!
Upon further inspection of jiffypc.com, I noticed that it didn’t really have any content, just a bunch of links to other services; links like “Diagnose your computer problems with such-and-such software” or “Local Computer Repair Services”. At the bottom of the website, in fine print, I saw a link that said “Click here if you are interested in purchasing this domain”. Ah-ha! This was a good sign. That means that there wasn’t a legitimate business out there called JiffyPC, it just means that someone had bought the domain name hoping to sell it for a profit. This is what’s known as website flipping. It’s been a pretty popular way for tech-savvy folks to make money and you’ll see why in a moment.
So I clicked the link and was forwarded to a form to fill out. The form would be forwarded to a “domain broker”. I found out a domain broker, much like in real estate, is a person or company that negotiates a selling price between the buyer and seller of the website “property”. The form I filled out asked for my contact information and an initial “bid” amount. It suggested that I bid based on how popular I expect the website to be (translation: how bad do you want it?), with the average bids being somewhere around $1500. $1500?! No way. I bid $100.
The broker responded saying that the buyer declined my bid and is asking for $1750, adding, “Owners of valuable domains will often receive several offers per week. Your offer should be great enough to motivate the domain owner to reply.” What? You gotta be kidding me. I had a feeling that there weren’t many other people out there bidding on this domain, so I gambled on the fact that I could still bid well under the asking price and get the website. I offered $500, which, to me, was still too expensive, but the maximum I was willing to go.
The next day I received a response saying the owners were “willing” to offer the domain for $700. Oh, gee, how nice of them. I replied saying that “we” could not afford to budge past $500. I used the word “we” so the broker would have the perception that they were dealing with a company that knew the actual worth of the name, and not some wet-behind-the-ears wannabe business owner who really just couldn’t afford anything more than that.
The broker said she would try to convince the owners to sell at this price. Lo and behold, about two days later, the sellers agreed. I saved $1250 just like that! I could have very easily given up, or if I could afford it, paid the price they offered at first. It just goes to show you that in the online realm, even more so than real estate or even used car dealerships, there are shady folks out there looking to screw over unsuspecting consumers. Needless to say, this whole process was a bigger headache than I ever could have anticipated.
What did I learn?
Based on my experience, here are some tips to take into account if you ever find yourself faced with purchasing a domain from a broker:
- Understand what the domain is really worth – Most website flippers are out to make as much profit as they can from selling their domains. That means that their initial offer will probably be overinflated. Think about how popular the domain could be. If it includes hot topical buzzwords in it like iPod, Obama, or Palin, then chances are it’s going to be worth a lot. Other examples of expensive in-demand domains are one word domains like car.com, health.com, or computer.com. But in my case, and many of your cases, the domain name will be something you came up with off the top of your head, not related to anything in particular. In that case, feel free to bid whatever you can afford. There’s no hard and fast rules to this game, so don’t let the broker set the rules for you.
- Once you decide on a bid amount, stick to your guns – Once you present your bid, stick to it, even if the broker tries to meet you “halfway”. Only increase your bid when the broker tells you that the current bid has been flat-out rejected.
- Be courteous – Even if you are upset with how things are progressing, it’s always important to keep cool, be polite, and stay professional. Most of these website flippers are making money from the advertisements and links they put on their for-sale domains. So they’d probably be more willing to wait for the next offer to come by than deal with a jerk buyer.
- Act like you know what you’re doing, even if you don’t – Brokers can probably smell an amateur a mile away and will be quick to take advantage of that fact. Concentrate on presenting yourself as a professional. Write well-constructed grammatically correct emails and it may even help to use “we” instead of “I”, just so they think they’re dealing with a firm or organization with some experience. This transcends just bidding on a website. It is important to present yourself as you would like to be perceived in all aspects of your business.
A big part of choosing a business name is making sure you secure the domain (the name of your website) for your business name. How do you make sure you’re choosing the right domain name?
- ♦ Try to get www.yourbusinessnamehere.com if it’s not already taken.
- ♦ Even if your dream domain name is being used, check to see if it might be for sale.
- ♦ If you can’t get the exact .com domain you want, there are other alternatives such as an alternate spelling of your business name, or ending the domain in .net, .biz, or some of the other endings that are available to the public.
- ♦ But it’s really important to try to get that .com name if you can, becuase that is what people will try first when attempting to find your business on the internet.
- ♦ Take into consideration alternate spellings or abbreviations of your name and try to get the domains for those as well.
Hopefully my story proves useful to those of you who have yet to get your business domain name. Hurry up and grab it as soon as possible, though, because domains are being scooped up left and right by flippers.
Updates to Resources Page under “Naming Your Business”:
- Added links to the two domain registrars that I’ve had the best experience with, GoDaddy.com and Dotster.com.
- Added a great domain name generator by 123Finder.com.
- Linked to a blog with 10 Solid tips for choosing a domain name.
- Updated: Is this all greek to you? I’ve added a link to an article called “How to Register Your Own Domain Name”. It’s a great beginners guide that breaks down all the steps I’ve spoken about in my article for folks who have no experience with the process.